CAD/JPY

• 15-Min: The automated pattern recognition feature in VT Trader picked up a breakout from a rising wedge in the 15-min time-frame.
• The quality gauges are decent especially the initial trend and breakout strength as well as the length of the formation.
• Since the break is coincident to an oversold reading in stochastics, there may be some minor correction in the next hour before continuing this decline if at all.
• Daily and 4H: Looking at the higher time-frames below we can see if this is a valid level for reversal.
• In the daily, we see this is now testing the 78.6% retracement of previous downswing. Also noted is a congestion pattern; triangle formation. However it is possible this congestion will open up to sideways consolidation between 79.50.00 and 88.50.
• Therefore there may still  be some further rally in the short-term towards 88.50, especially with the stochastic suggesting strong bullish momentum.
• However, there is still a possibility that within the next couple of hours we may have a very near-term correction to the 85.90 area, the intermediate support. This validates the zone that the software provided. If the market breaks below 85.50, then it may head towards the consolidation support with upper bound at about 81.00.

Fan Yang
Currency Analyst
Commodity Trading Advisor

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All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.